Gold beat a hasty retreat on Tuesday as investors latched on to seemingly hawkish remarks from the U.S. Federal Reserve chair, erasing gains from an over 1% rally fuelled by concerns over the Omicron coronavirus variant. Spot gold fell 0.7% to $1,773.21 per ounce by 02:14 p.m. ET (1914 GMT). U.S. gold futures settled down 0.5% at $1,776.5. Prices earlier rose as much as 1.3% earlier in the session after a warning from Moderna's CEO that COVID-19 vaccines were likely to be less effective against the new variant. In a testimony before the U.S. Senate Banking Committee, Fed Chair Jerome Powell said the Fed likely will discuss speeding up its taper of large-scale bond purchases at its next meeting. read more Powell's comments drove a slight rebound in the dollar, which has steadied since then. "Everyone got a little surprise as Powell moved closer toward the hawkish side," said Edward Moya, senior market analyst at brokerage OANDA, adding the Fed would likely implement rate hikes at a more rapid pace. Gold is used to hedge against inflation, but interest rate hikes raise the opportunity cost of holding gold. read more But longer term, gold will be supported by worries over the virus variant, Moya added. Gold's fall came alongside a tumble in Wall Street after Powell's comments hinting at a faster shift to tightening policy hurt risk sentiment already weighed down by concerns over Omicron. Elsewhere, spot silver fell 0.1% to $22.86 per ounce, platinum dropped 2.6% to $938.50 and palladium slumped 3.5% to $1,732.50. Looking ahead to 2022, increased investment in solar panels should boost silver, BofA Global Research said in a note. "Platinum is the rebound trade on a normalisation of chip shortages in the auto industry; substitution from palladium should also help." Reporting by Ashitha Shivaprasad, Asha Sistla and Arundhati Sarkar in Bengaluru; Editing by Amy Caren Daniel and Andrea Ricci Our Standards: The Thomson Reuters Trust Principles.